Did wall street try to scare main street into bailing them out?

[strmrdr]

Did wall street try to scare main street into bailing them out by crashing the market?

 

[LaraOnline]

voting''s tonight (my time), right? As in... about five hours from now?
Keep us posted, Strmrdr!

 

[tradergirl]

I''d say that''s less likely than it would have been 3 weeks ago. You can''t short a lot of individual stocks and options have gone haywire because of that and the high VIX. The end of September was when "investors" had to put in their redemption requests to hedge funds (lol) and they have to sell now to give money back to people who requested it. Futures driven programs are probable but there are fewer IBs around to do it anymore. We''ll get a better sense of what''s what when the short selling ban expires (3 days after the "rescue" bill is enacted). No matter what, it''s going to be a bloodbath for most hedge funds this year. That was a disgusting bubble as well and this year and next should see the herd being thinned considerably. No more 30 year old masters of the universe "running" 500M of OPM and taking down $10M for themselves. Should do wonders for NY real estate prices. People who think Manhattan can never go down really ought to go back and look at NY Times articles in 1990-1994 or so.

 

[stone_seeker]

Date: 10/2/2008 6:40:12 AM
Author: tradergirl
I'd say that's less likely than it would have been 3 weeks ago. You can't short a lot of individual stocks and options have gone haywire because of that and the high VIX. The end of September was when 'investors' had to put in their redemption requests to hedge funds (lol) and they have to sell now to give money back to people who requested it. Futures driven programs are probable but there are fewer IBs around to do it anymore. We'll get a better sense of what's what when the short selling ban expires (3 days after the 'rescue' bill is enacted). No matter what, it's going to be a bloodbath for most hedge funds this year. That was a disgusting bubble as well and this year and next should see the herd being thinned considerably. No more 30 year old masters of the universe 'running' 500M of OPM and taking down $10M for themselves. Should do wonders for NY real estate prices. People who think Manhattan can never go down really ought to go back and look at NY Times articles in 1990-1994 or so.

The good managers will not only be fine but make even more money this year. Our fund is up over 40% this year and thats without excess leverage. There are many more like that and this shakeout is great for good funds because the bad / marginal manager will close up shop and that money will flow to managers who are outperforming. Studio and 1BR manhattan pricing will soften but aside from that its etremely stable. Manhattan forclosures have been nonexistant to date and any distressed apartment gets bought real fast. Supply/new builds have slowed so inventory is not a problem here as it has been in some overdeveloped parts of the country. I wish you were right because then I'd buy even more property.

To answer the OP's question, I would say yes and no. They offered a scary alternative scenario in which the probability of it occuring is increasing. So yes they did scare main street but for a good reason. I am not saying this bill is the best solution but its the only one they can pass in short order. America loves to throw money at problems and that is whats happening. GE, a company that has been around forever, a good credit and probably in the 401K of millions of Americans needed to pay 10% to raise money. Thats ridiculous. If they have to pay 10%, what will smaller companies have to pay? What if they cant pay that rate? Those a real situations that have serious impacts on the lives of everyday folks.

 

[Dancing Fire]

Date: 10/2/2008 7:44:28 AM
Author: stone_seeker

Date: 10/2/2008 6:40:12 AM
Author: tradergirl
I''d say that''s less likely than it would have been 3 weeks ago. You can''t short a lot of individual stocks and options have gone haywire because of that and the high VIX. The end of September was when ''investors'' had to put in their redemption requests to hedge funds (lol) and they have to sell now to give money back to people who requested it. Futures driven programs are probable but there are fewer IBs around to do it anymore. We''ll get a better sense of what''s what when the short selling ban expires (3 days after the ''rescue'' bill is enacted). No matter what, it''s going to be a bloodbath for most hedge funds this year. That was a disgusting bubble as well and this year and next should see the herd being thinned considerably. No more 30 year old masters of the universe ''running'' 500M of OPM and taking down $10M for themselves. Should do wonders for NY real estate prices. People who think Manhattan can never go down really ought to go back and look at NY Times articles in 1990-1994 or so.

The good managers will not only be fine but make even more money this year. Our fund is up over 40% this year and thats without excess leverage. There are many more like that and this shakeout is great for good funds because the bad / marginal manager will close up shop and that money will flow to managers who are outperforming. Studio and 1BR manhattan pricing will soften but aside from that its etremely stable. Manhattan forclosures have been nonexistant to date and any distressed apartment gets bought real fast. Supply/new builds have slowed so inventory is not a problem here as it has been in some overdeveloped parts of the country. I wish you were right because then I''d buy even more property.

get your money ready. you''ll get a chance to buy at a lower level.

 

[Beacon]

Date: 10/2/2008 7:44:28 AM
Author: stone_seeker


The good managers will not only be fine but make even more money this year. Our fund is up over 40% this year and thats without excess leverage. There are many more like that and this shakeout is great for good funds because the bad / marginal manager will close up shop and that money will flow to managers who are outperforming. Studio and 1BR manhattan pricing will soften but aside from that its etremely stable. Manhattan forclosures have been nonexistant to date and any distressed apartment gets bought real fast. Supply/new builds have slowed so inventory is not a problem here as it has been in some overdeveloped parts of the country. I wish you were right because then I'd buy even more property.

To answer the OP's question, I would say yes and no. They offered a scary alternative scenario in which the probability of it occuring is increasing. So yes they did scare main street but for a good reason. I am not saying this bill is the best solution but its the only one they can pass in short order. America loves to throw money at problems and that is whats happening. GE, a company that has been around forever, a good credit and probably in the 401K of millions of Americans needed to pay 10% to raise money. Thats ridiculous. If they have to pay 10%, what will smaller companies have to pay? What if they cant pay that rate? Those a real situations that have serious impacts on the lives of everyday folks.

Stoneseeker, my thoughts exactly re: GE and the Buffett deal.

To the OP: no, wall st did not crash itself to scare people into the bailout.

 

[tradergirl]

Stoneseeker: are all your assets marked to market? Could you liquidate today at the values you have on the books?

This is not the bottom. Not even close. And I''ll make you a friendly $1 bet that NY prices will come down 25% from here before they bottom out.

Wyser-Pratte fund blocks withdrawalsGuy Wyser-Pratte has blocked withdrawals from his hedge fund after the veteran New York arbitrageur and activist warned that the “calamitous” market conditions were the worst since he started trading in the 1960s. Wyser-Pratte Eurovalue, a $500m fund campaigning for change at mid-sized companies across Europe, suspended withdrawals on Tuesday after some clients asked for their money back, saying it was acting to protect investors. The fund is the latest to be hit by withdrawals amid a wave of redemptions that industry experts are warning could prompt further sales of assets to raise cash to meet redemptions. Equity and bond markets have already been disrupted by hedge fund selling this year as the industry cut back on leverage and raised record amounts of cash.

 

[tradergirl]

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[miraclesrule]

YES!! Fear mongering hs been the hallmark of this administration. Creating internal and external threats incites fear and then we become immobilized and we become easy prey and pawns in their tiwsted manipulative game. The answer is a resounding yes.

 

[tradergirl]

More on the coming hedge fund and private equity crackup. And not soon enough. Some day if you really want to get annoyed, read up on how private equity funds make their money. They "buy" companies using borrowed money, strip out all equity to pay themselves "fees" and then "run" the companies by "cost cutting" (i.e., eliminating jobs). The ultimate goal is to hold on for a few years and then flip the company back out into the public markets for yet another profit. Think "Flip this Corporation" as opposed to "Flip this House." It's is truly unbelieveable.

http://www.thestreet.com/story/10440873/1/kass-baby-its-cold-outside.html

http://www.reuters.com/article/reutersComService4/idUSTRE49236D20081003

http://www.pbs.org/newshour/bb/business/jan-june07/equity_02-08.html

 

[shel]

Date: 10/7/2008 9:00:56 AM
Author: tradergirl
More on the coming hedge fund and private equity crackup. And not soon enough. Some day if you really want to get annoyed, read up on how private equity funds make their money. They 'buy' companies using borrowed money, strip out all equity to pay themselves 'fees' and then 'run' the companies by 'cost cutting' (i.e., eliminating jobs). The ultimate goal is to hold on for a few years and then flip the company back out into the public markets for yet another profit. Think 'Flip this Corporation' as opposed to 'Flip this House.' It's is truly unbelieveable.


http://www.thestreet.com/story/10440873/1/kass-baby-its-cold-outside.html


http://www.reuters.com/article/reutersComService4/idUSTRE49236D20081003


http://www.pbs.org/newshour/bb/business/jan-june07/equity_02-08.html

Yep, seems like we'll have a "correction" in the hedge fund salaries. Masters of the universe no more...

 

[Harriet]

Date: 10/2/2008 7:44:28 AM
Author: stone_seeker

The good managers will not only be fine but make even more money this year. Our fund is up over 40% this year and thats without excess leverage. There are many more like that and this shakeout is great for good funds because the bad / marginal manager will close up shop and that money will flow to managers who are outperforming. Studio and 1BR manhattan pricing will soften but aside from that its etremely stable. Manhattan forclosures have been nonexistant to date and any distressed apartment gets bought real fast. Supply/new builds have slowed so inventory is not a problem here as it has been in some overdeveloped parts of the country. I wish you were right because then I''d buy even more property.

To answer the OP''s question, I would say yes and no. They offered a scary alternative scenario in which the probability of it occuring is increasing. So yes they did scare main street but for a good reason. I am not saying this bill is the best solution but its the only one they can pass in short order. America loves to throw money at problems and that is whats happening. GE, a company that has been around forever, a good credit and probably in the 401K of millions of Americans needed to pay 10% to raise money. Thats ridiculous. If they have to pay 10%, what will smaller companies have to pay? What if they cant pay that rate? Those a real situations that have serious impacts on the lives of everyday folks.

Exactly.

 

[diamondfan]

TG, there is no law against making money or you would be in trouble too.

Sometimes, a company is terribly run and bleeding out money and about to shut totally. I suppose YOU favor the company shutting down and EVERYONE losing their jobs?

 

[miraclesrule]

Diamond Fan, you bring up an interesting topic. Should Americans bail out failing corporations simply because a lot of people will lose their jobs? Should that be our sole consideration? Personally, I don''t think so.

Some industries and companies are not worth saving. Savvy employees would have recognized the threat and jumped ship before the companies collapsed. As an American, I don''t feel I owe someone their job anymore than they should feel that my current company owes me mine.

As one door closes, inevitably, another opens. There are some employees who believe that the companies they have worked for owe them a job for eternity. I just don''t buy into that belief. In fact, I believe that the company wouldn''t even blink at salvaging their company by unloading jobs. Many times, the reality is that they are saving their own money and the act is self-serving.

And what happens when certain industries or companies become obsolete? They can''t stay in businss just because they owe it to their employees. That''s impossible.

I have no problem with people making money. But I do have a problem with people making their money on the backs of hard workers and leaving them high and dry. But then again, I don''t need to police the universe as I believe in karma.

 

[diamondfan]

It depends, Janice. I mean, a huge industry like the automobile industry needs to be saved. We need car companies to be competitive in a reasonable way, They need to come up with fuel efficient safe cars that are affordable and help cut down on emissions. Every company in the US cannot be saved if they are in trouble, but textiles, manufacturing, etc, things that are hugely important and employ thousands need to be helped.